First Pennsylvania Deal With Meridian Could End

After two weeks of inconclusive merger negotiations, the Meridian Bankcorp announced yesterday that it had agreed that the First Pennsylvania Corporation could solicit other bids through Sept. 25.

Provided it has first given Meridian an opportunity to respond to offers from other companies, First Pennsylvania, a banking company based in Philadelphia, may terminate any merger agreement with Meridian, which is based in Reading, Pa., without penalty.

Leslie R. Butler, a vice chairman at First Pennsylvania said, ''At this time, we have no other offers.'' But, he added, investment bankers at Shearson Lehman Hutton Inc., First Pennsylvania's financial adviser, are speaking with other firms.

Although the banks are continuing to discuss merger plans, Meridian warned that it might withdraw its bid if no agreement is reached by Friday. 'Shopping the Company'

''First Pennsylvania feels they have an obligation to their shareholders, and they are out shopping the company to get the highest price they can,'' said Bucky Rulon-Miller, an analyst at W. H. Newbold's Son & Company, a Philadelphia securities firm. Meridian, Mr. Rulon-Miller said, ''is putting pressure on First Pennsylvania by warning that the offer might be withdrawn.''

Meridian has offered $18 for each share of First Pennsylvania, with payment to be made in Meridian stock, so that it is not subject to tax. Meridian estimated, and analysts agreed, that the offer was about 11 percent higher than the cash price First Pennsylvania shareholders would have received in 1991, under an earlier merger agreement reached with Marine Midland Banks. Marine Midland has agreed to sell to Meridian its right to buy First Pennsylvania, if Meridian can strike a bargain with the Philadelphia bank. Marine Midland's cash offer would be taxable for First Pennsylvania shareholders.

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A version of this article appears in print on September 12, 1989, on Page D00013 of the National edition with the headline: First Pennsylvania Deal With Meridian Could End. Order Reprints|Today's Paper|Subscribe